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Blogging Wealthtrack: Christine Benz from Morningstar comes clean with retirees

 There's a big series of controversies these days with covid. And politics has not been a simple matter to stay out of. Many people have had enough.

Benz puts all of this aside quite nicely in this video with Consuelo Mack this week. The full video here but I will highlight a few interesting points that I think are worth considering. 

Starting with the numbers, Benz notes that there are 20.6 million job losses and a 14.7 million US unemployment rate. So, there continues to be real impact to large numbers of people in the economy. And the pandemic rages on: 20.7 million US covid cases. 

When it comes to investment choices, Consuelo continues to bring up There Is No Alternative. More than a catchy acronym, the idea that people are searching for yield is a concept that might be driving stocks to ever higher prices. Benz dodges this well, and generally does a good job of providing advice which is applicable regardless of what your investments are in. 

One key departure from this is a mention of total return. I won't say much more about this because Benz didn't mention specific product, but did mention it was the "way to go."

On a more traditional note, she mentioned some items that may already be familiar strategies:

1. Trimming appreciated assets for income 
2. Also consider using HSA as a savings tool, in particular for tax advantages.
3. Paying down fixed rate debt for things like a mortgage if it beats the returns expected in your investments, especially if you don't need the liquidity

Over the longer term, Benz believes that retirees should be conservative with their withdrawal rates in light of potential lower returns in the future. She mentions of course the classic issue of sequence of return risk which highlights the impact of retirees seeing a major stock market crash right after their retirement.

WealthTrack has been a favorite show of mine for several years now and although I feel it has taken a more direct bent toward advertising, Consuelo continues to bring on thoughtful and interesting guests and has done a nice job of transitioning from public funding to sponsored series. This video of the interview with Benz was a nice opportunity to revisit some considerations for retirees. 

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